Payroll ? - $ discrepancy

[hamrickdt]

Our youth pastor kept his W4 info the same as last year and his pay has not changed:

FIT-M
claim - 0

Yet, there is $1.00 difference between the first check in January and this last check. It went up $1.00 in the FIT. Is this because the personal exemption rate changed? Even though when a person claims '0' the "Exempt/Year" shows up as 0.00?

I just want to make sure.

Thank you!

Have a blessed day!

[hamrickdt]

Is there someone that can help me with this? We had 2 checks in January...the W4 info was submitted and input before the second check was cut but there was no change made to the W4 info or the pay rate - the only change is the personal exemption rate has gone up from last year. Would this make a difference given the information from the previous post? Would it affect the FIT by a $1.00?

I am getting ready to cut checks again soon and would like to be able to understand why this happened.

Thank you!
Tammy

[NeilZ]

I've not done anything with payroll at the church I'm currently in, but if the withholding rate changed, it does affect the amount withheld !!

[tborgal]

Did you make any changes to the payroll information at all?? The withholding tables changed a little for 07. If you changed these in your tax tables the withheld amount should be less not more. The amount of change would depend on the amount paid.

[hamrickdt]

Thank you for replying - I've been out sick!

Yes, I did make the changes to the tables (tax tables were updated per Table 7 of the Circular E and the 2007 personal exemption rate was changed to reflect $3400.00). I'm not sure if I was clear though. His check increased in FIT by $1.00 - meaning on the second check he received $1.00 more than he did on the first check (so his first check might have been $1000.00 with FIT being $99.00 his second check would have been $1001.00 with FIT being $98.00).

I hope I haven't made this more confusing! I'm just wanting to make sure that my numbers are correct before this gets too much further along - also, I'd kind of like to understand why this happened.

Thank you so much!
Tammy

[tborgal]

This is exactly what I would have expected. There is nothing wrong with the numbers. Any time you make a change to your tax tables the amount withheld will change. In this case the amount in each tax bracket increased by a small amount. This means that the tax rate actually went down and less was withheld. You can make a little more money within that lower tax bracket. Also the personal exemption went up by $1000. This means there is $1000 more in tax free money that can be earned, again meaning less will be withheld. So apparently the combination of these two changes reduced the withholding by $1.00 therefore increasing the net pay by $1.00. Hope this clears this up for you.

And I hope you are feeling better.

[hamrickdt]

Tom,

Thank you! That does help...and thanks, I am finally feeling better!

Tammy